Real estate, alternative real assets and other diversions

Consilia Capital Real Assets Monitor Annual Performance for 2018

The Fund Manager

The report is divided into the following sections:

1)       A summary of 2018  performance 

The table below, shows the average 2018 performance per mandate, and is ranked by 2018 returns with 2017 and 2016 figures for comparison.  As can be seen no individual mandate generated positive returns, although this is in the context of negative calendar returns for virtually all asset classes.

2)       Focus : Annual Performance Review (p4)

 This month we look at the 2018 performance of our different fund mandates in the context of:

i)        The last 5  years absolute performance

A poor year for all funds with last year’s star two performers (Regional Infrastructure and Europe) impacted the most. In fact European funds have always been amongst the best/worst performers in alternate years, lending some credence to a regional rotation strategy

ii)       The 5  year relative performance of real estate vs infrastructure

Global real estate and infrastructure funds have had moderately contrasting annual returns which suggests a reasonable level of diversification could be achieved by combining them in a” real asset “grouping

iii)      Whether fund size had an impact on performance

With the exception of Regional Infrastructure there was no evidence of small funds outperforming larger funds in 2018, in fact the reverse was true

iv)     The 5 year risk and return profile of real estate, infrastructure, and income funds

Regional Infrastructure has the highest return profile, with a commensurately higher volatility.  Interestingly in this period Income based funds have generated higher returns with a similar level of volatility to Global RE and Infrastructure, despite the headwinds of a rising interest rate environment

3)       Detailed performance statistics by mandate for 2018 (p7)

 This month we look at the data for 2018. For each mandate we show: the dispersion of returns by Fund AUM, aggregate performance by size, active vs passive performance, Benchmark Index returns, and the best performing active funds above an AuM threshold for each mandate.  For consistency, all returns are rebased in US$.

The Fund Manager

About Alex Moss

Alex Moss

Alex is responsible for developing the newly created Centre for Real Estate Research at Cass Business School. He also runs Consilia Capital, a research and advisory firm, which specialises in the performance and strategies of real estate, infrastructure and real asset funds, work that combines academic research with practical applications. He has been involved in research and transactions in the global real estate sector for over 30 years. His career has encompassed sell side research (BZW, Macquarie), investment banking (CSFB), private equity (Apax Partners Capital), and fund management (M&G and Investec). He is Chairman of the EPRA Research Committee, a member of the EPRA Advisory Board, and Chairman of the Investment Committee for the Investec Global Real Estate Securities Fund, where he acts as a consultant. Alex is best known for his academic and commercial work in the area of Global REITs, and their use in investment strategies. In 2013, with Professor Andrew Baum they produced two innovative papers for EPRA which received wide acclaim, looking at whether listed real estate was managed as part of the real estate allocation, and the wider use and applications of listed real estate securities in asset management. His work with Kieran Farrelly on combining direct and listed property for Defined Contribution Pension schemes won a Best Paper award at the 2014 ERES conference. A particular area of interest is the use of Smart Beta and automated trading strategies, most notably Trend Following and Momentum, and his work in this area with Professor Andrew Clare and Professor Steve Thomas has been widely cited. In 2017, with Reitsmarket he produced two multifactor Global REIT Smart Beta indices, which are listed on Euronext, and marketed by Goldman Sachs. Most recently he has been concentrating on the use of listed real estate within real asset strategies.

Articles by Alex Moss

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